GBP/USD Price Forecast – British Pound Pulls Back From Resistance

The British pound has pulled back significantly from the 1.26 level. The market then reached down towards the 1.25 handle, an area that looks as a bit of a fulcrum for price. At this point, the 50 day EMA is currently sitting at the 1.25 handle, and it could offer a bit of support. Ultimately, this is a market that continues to chop around and show signs of volatility. Keep in mind that the Federal Reserve is doing what it can to inject liquidity into the markets which should break down the value of the US dollar. That being said though, Great Britain has a lot of issues when it comes to opening up the economy, and of course anything involving growth is unlikely that happen anytime soon.

GBP/USD Video 04.05.20

The 1.26 level above has the specter of the 200 day EMA above it, so that could bring some selling back in. At this point, the market pulling back from there makes quite a bit of sense, because we continue to see a lot of back and forth choppiness. Essentially, this is very sloppy and painful trading for a lot of different traders, so keep in mind that the most recent low is higher than the previous low, but the most recent high is even with the one before it. The question is did we just form a double top? Or, did we simply get a slight pullback before a continuation? At this point, you have to treat this market as a range bound market between 1.26 above and 1.23 below. 1.25 is a bit of a magnet.